Wednesday, November 14, 2007

Revisionist Marketing - Schlitz Brewing Company

I was just writing a paper and looking up some relevant examples for quality management. I was interested to find in a textbook the story of Schlitz Brewing Company. Turns out that in the 1970s the brilliant management of the company decided they could cut costs and make lots of money. So they added lots of corn syrup instead of malt, warmed up their fermentations, and basically decreased the brewing turn around time by 50%.

Great, right? They could make way higher returns on sales and assets than anybody else in the market. One problem: nobody except the hardcore alcoholics that wanted the cheapest beer possible regardless of flavour would buy the stuff. Sales fell 40% by 1980, the stock crashed from $69 to $5 and the 100 year old brewery was eventually sold off. You can find this and more info at this Wikipedia article.

You can still buy Schlitz beer from Pabst Brewing Company, presumably with a better brewing process. So I went to their site just to see what it said. I found this statement in the marketing-speak:
Schlitz is one of the undiscovered gems of American beer and today, young adult consumers are embracing the brew because it has stayed true to itself and hasn't "sold out".
Hm... if I read my history accurately back there, Schlitz is the ultimate definition of "selling out"; they tried to make money by not respecting their customers enough to think they would buy an inferior product.

Anyway, its not that important, it just reinforces my already strong belief that most marketing we get these days doesn't respect our intelligence. Plus I haven't posted in awhile...